Six months after its high-profile announcement at the White House, the $500 billion Stargate project -- an ambitious joint venture between OpenAI and SoftBank to ramp up America's artificial intelligence infrastructure -- has run into major delays and scaled-back ambitions.
The Details: Despite a splashy debut that included vows of investing $100 billion "immediately," Stargate has yet to secure a single major data center deal.
Instead, the project is now focused on building a much smaller facility in Ohio by year's end, as partners struggle to agree on crucial terms, according to the Wall Street Journal.
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At the heart of the slowdown are differences between OpenAI and SoftBank regarding the partnership's structure and implementation, which have prevented the new entity from making significant advances.
Although both companies committed billions and shared leadership responsibilities -- SoftBank's Masayoshi Son overseeing finances and OpenAI's Sam Altman managing operations -- persistent disputes over control and strategy have left Stargate's momentum waning.
Why It Matters: OpenAI has forged ahead independently, recently striking a blockbuster $30 billion annual deal with Oracle Corp. (NYSE:ORCL) for cloud computing capacity. The agreement with Oracle, along with smaller deals with other data center providers, brings OpenAI close to meeting the annual expansion targets Stargate set out for itself, even as the joint project lags behind.
SoftBank, undeterred by setbacks, remains optimistic about OpenAI and is reportedly interested in further investment despite Stargate's rocky start.
While leaders from both companies publicly maintain that their partnership is strong, the reality is that slow progress and internal disagreements have dampened early expectations.
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